RBI's rate cuts to propel growth, spike demand: India Inc
While all anticipated a cut in repo rates, particularly after the apex bank's hawkish monetary outlook last evening, the move to infuse fund with 25 basis points cut in cash reserve ratio into the banking system took the industry by a pleasant surprise.
"This will hopefully help in reversing anaemic industrial growth observed over the last year... The release of Rs 18,000 crore with CRR cut will help in easing funds flow situation," Ficci President Naina Lal Kidwai said.
Enthralled with the cuts, hopes also started taking wings with some predicting it would spike demand and thus provide a much-needed boost to economic growth. Others suggested that it will lead to lower interest costs and improve bottomlines.
CII's Director General Chandrajit Banerjee said the weak consumption and investment demand was derailing the momentum of economic growth and today's announcement would help improve the sentiments of both consumers and investors.
The association's President Adi Godrej said the industry appreciates the signal from the RBI that the central bank is ready to promote growth in addition to anchoring inflationary expectations.
Assocham President R N Dhoot said: "The reduction is a step in the right direction. However, the system has to take this in the true spirit and benefits have to be passed on to the end users."
JSW Steel's Joint Managing Director and CFO Seshagiri Rao said: "It
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